Smartphone shipments in China have dropped more than 21% to 91 million units, marking the biggest ever decline.
Eight of the top 10 smartphone brands were hit by the declines with Oppo and Vivo bearing the brunt of the hits with shipments falling 10% to 18 million and 15 million respectively. Samsung, Gionee and Meizu all recorded drops in shipments, which shrunk to less than half of their respective Q1 2017 numbers.
Xiaomi was the only company to experience growth, with shipments up 37% to 12 million units. While market leader Huawei remained stable, managing a 2% lift in shipments and consolidating its market leadership with 24% of the market with over 21 million smartphones.
The top four vendors, Huawei, Oppo, Vivo, and Xiaomi, together accounted for more than 73% of shipments in China in Q1 2018. Apple has now dropped to fifth place in the China market and
Canalys Research analyst Mo Jia said the figures reveal a sense of fatigue in the market.
“The level of competition has forced every vendor to imitate the others’ product portfolios and go-to-market strategies. But the costs of marketing and channel management in a country as big as China are huge, and only vendors that have reached a certain size can cope. While Huawei, Oppo, Vivo and Xiaomi must contend with a shrinking Chinese market, they can take comfort from the fact that it will continue to consolidate, and that their size will help them last longer than other smaller players.”
However, the China market is expected to return to growth in Q2, as Oppo, Vivo and Huawei launch new flagship devices.
“The inventory issues that Oppo and Vivo suffered in Q4 and Q1 are now behind them,” said Jia. “New smartphones will definitely entice people to upgrade, but vendors are more careful of avoiding oversupply in the channel. China’s smartphone market may see a short period of stagnancy as vendors refocus on research and development, relying on new use cases to excite refreshes rather than spending heavily on the channel and marketing.”